Justice Policy Institute Brief Links Crime, Wages and Unemployment

by Matt Clarke

On October 1, 2007, the Justice Policy Institute (JPI), a Washington, D.C.-based think tank, published a research brief linking crime rates to wages and unemployment levels. In general terms, JPI found that higher crime rates occur when unemployment rates rise and that increases in wages lead to decreases in criminal activity. The impact of the relationship between unemployment, wages and crime rates was the greatest among people of color. These findings are especially important when the current instability in the U.S. economy is considered.

One-third of jail prisoners were unemployed prior to their arrest according to JPI. This compares with a 4.6% general public unemployment rate. However, the unemployment rates were determined by the number of people applying for unemployment insurance and might miss the chronically unemployed.

Wages for jail prisoners were lower than the general public. In 2002, 83% of jail prisoners reported monthly incomes of less than $2,000, about a third less than the national average. The national average income for the general public was a little over $3,000 in 2003.

One correlation--the relationship between crime rates and unemployment-- seems to be a positive feedback loop. More jail prisoners are unemployed than the general population.
Ex-prisoners have a significantly higher unemployment rate and lower average wages than the general public. Lower wages are also associated with increased criminal activity.
The overall result of the unemployment-crime-incarceration cycle “prevents communities and individuals from improving their life outcomes and acquiring social capital.”

JPI found that increased employment is associated with positive public safety outcomes. During a 33% drop in unemployment from 1992 to 1997, property crimes decreased dramatically. This included reductions by 30% for robberies, 15% for auto thefts and 4% for larcenies. “Slightly more than 40% of the decline can be attributed to the decline in unemployment.”

Increased wages were also associated with public safety benefits. A 10% increase in wages was associated with a 1.4% decrease in the number of hours young men spent engaging in criminal activities.

Areas with higher levels of employment had lower violent crime rates. Of the ten states with the lowest unemployment rates, eight had violent crime rates below the national average. Half of the ten states with the highest unemployment rates had violent crime rates above the national average.

A one percent decrease in the unemployment rate was associated with a 1.6-2.4% decrease in property crimes, a 0.5% decrease in violent crimes, a 2% decrease in burglary rate, a 1.5% decrease in larcenies and a 1% decrease in auto thefts. A one percent increase in the civilian labor force is predicted to decrease the violent crime rate by 8.8 crimes per 100,000 people.

Incarceration also led to crime. Areas with the highest incarceration rates one year had higher-than-expected crime rates the next year. This may tie in to the inability of ex-prisoners to find employment.

Given the failure of imprisonment to prevent crime and the links between lower crime rates, lower unemployment rates and higher average wages, government planners should focus on employment-related educational programs and job creation programs rather than incarceration if they truly wish to reduce crime. Source: Employment, Wages and Public Safety, Justice Policy Institute, October 1, 2007.